Challenging Members to Save for Higher Education

Credit unions are uniquely positioned to help members plan and save for a college education.

 
 

U.S. parents have high academic aspirations for their children, yet many are not financially prepared for the ever-increasing price tag attached. Given the credit union industry’s ability to offer members above average savings rates, education savings and financial preparation programs should be integral to most member service initiatives.

According to CollegeBoard.com, sending a student to Harvard will cost $58,645 in 2005. PACreditUnions.com projects a Harvard graduate in 2020 will ring up a $360,000 bill after four years! As tuition rates continue to trend upwards with no sign of slowing any time soon, members need long-term saving and financial planning programs.

Too many birds, not enough worms

Though credit unions are uniquely positioned, competition is intense and financial service offerings are numerous.

The Charles Schwab brokerage firm, for example, offers a wide variety of education and savings accounts targeting parents seeking to plan for their children’s education. By branding with Wannado Entertainment on a child’s amusement park focused on personal finance, State Farm Bank targets its marketing efforts at parents.

There are a number of service providers in the market today that provide educational savings and financial planning programs. BISYS, for example, has recently started offering College Central, an application that updates websites with the latest available college savings options. In an age of fast-growing 529 college savings and prepaid tuition programs, Coverdell/ESAs, Roth IRAs, and a slew of other investment opportunities, credit unions need to develop the capability—either in-house or via partnerships—to offer a broad array of savings programs.

Life Event Marketings

Credit union’s offer a variety of programs to meet the needs of parents saving for their children’s education are concerned. Several credit unions, for example, have developed a lifestyle marketing approach. Orange County’s Credit Union ($781 million in assets, Santa Ana, CA), for example, has organized their website around specific life milestones. Members can click on a “Having A Baby” link and the site will direct them to credit union programs and information such as 529 accounts and a college planning timeline tool.

Florida Credit Union ($255 million in assets, Gainsville, FL) employs online and print means to entice people to adopt their products, emphasizing “life events” across the typical member’s lifecycle. Examples of this marketing approach include “Going to College,” “Buying a Car,” and “Special Times.”

 

 

 

Sept. 26, 2005


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